Royal Mail set for strike in dispute over pensions

Majority of Communication Workers Union members back first strike since the company was privatised four years ago

Postal workers are on the verge of a strike in a dispute over pensions, pay and conditions.

The Communication Workers Union (CWU) announced on Tuesday that a majority of its 111,000 members in Royal Mail had voted for industrial action, the first since the company was privatised four years ago.

The union said 73.7% of its members had turned out to vote, with 89% of them backing a walkout. Its executive will meet this week to determine any potential strike dates, which are likely to come before the end of the year. Some reports suggested that they could be timed to coincide with the so-called “Black Friday” sales on November 24 and 25, when many people do their Christmas shopping online.

The vote was a major test for the union after the introduction of the government’s controversial Trade Union Act, which requires strike ballots to have a 50% turnout.

It comes amid a flurry of union activity this autumn as public sector and health workers discuss the possibilities of industrial action.

Dave Ward, the CWU general secretary, said: “This is an important moment and we can go forward into any action knowing we have secured the numbers required. We have seen an unprecedented response from our members, and we are taking a lot of confidence from this result.

“Our members are under attack. They are being asked to work faster, harder and cheaper while losing benefits. This has nothing to do with driving growth and innovation. It is all about a lack of forward thinking and asset stripping.”

Royal Mail said it was very disappointed by the ballot result, which did not necessarily mean a strike would take place.

“There are no grounds for industrial action. We want to reach agreement. Royal Mail is committed to further talks as a matter of urgency, to reach agreement with the CWU,” the company said.

Royal Mail said contractual dispute resolution procedures agreed to by the company and the CWU meant the dispute would be escalated to independent external mediation, “which we expect will take close to Christmas to be completed, and maybe longer”.

It added: “We believe these dispute resolution procedures must be followed. The union cannot take industrial action until they have been completed.”

The CWU announced last month that it would be balloting members who worked for Royal Mail group and claimed there were plans to worsen terms and conditions of existing employees and introduce a two-tier workforce.

However, it is the pensions row that is at the heart of the dispute, after Royal Mail announced it wanted to end the defined-benefit scheme.

In April, the company announced that the pension plan, which has 90,000 members and assets of £7.4bn, was in surplus, but said the scheme would soon become unaffordable.

The company, which was privatised in October 2013, pays £400m a year into the fund but it says this could rise to more than £1bn in 2018.

The scheme, which was closed to new members in 2008, guarantees a pension based on a postal worker’s average salary. Royal Mail is thought to have plans to replace it with a less generous defined-contribution scheme.

In a move that may be copied by other unions, the vote followed a campaign by the CWU called the “four pillars”, which calls for a decent wage in retirement, a shorter working week, a redesign of the company’s methods and an extension of current agreements.

The union has held a series of “gate meetings” outside sorting offices to gain support among members before the ballot.

Royal Mail argues it is operating in the most competitive delivery market in the world, with 16 major competitors including Amazon, which handles one in 10 parcel deliveries.

Letter volumes have declined 40% in the past 10 years as people increasingly prefer email. Royal Mail says it has spent £1.5bn on upgrading its IT systems to cope with the new world of technology. After 12 months in the job, postal workers earn £22,764 a year.

Royal Mail says under its proposed scheme, someone aged 50, earning £25,000 a year and retiring at 65 would retire on an annual pension of £12,300 and a tax-free lump sum of £81,800. It says this compares favourably with most other retirement deals.